THE UNITED STATES SECRETARY OF LABOR FILES AMICUS BRIEF IN SUPPORT OF PLAINTIFFS’ STANDING IN MITCHELL V. BLUE CROSS BLUE SHIELD OF NORTH DAKOTA

J.J. Conway Law | THE UNITED STATES SECRETARY OF LABOR FILES AMICUS BRIEF IN SUPPORT OF PLAINTIFFS’ STANDING IN MITCHELL V. BLUE CROSS BLUE SHIELD OF NORTH DAKOTA

On January 22, 2019, the United States Secretary of Labor filed an amicus curiae brief in support of the plaintiff-appellants/ cross-appellees Ivan and Melissa Mitchell in the matter of Mitchell, et al. v. Blue Cross Blue Shield of North Dakota, et al.

Blue Cross Blue Shield of North Dakota filed a cross-appeal in the matter arguing that the Mitchells, despite being fully insured for medical claims by Blue Cross, had ‘no legal or constitutional standing to sue for payment of their benefits.

Ms. Mitchell was transported by air ambulance during a winter storm between two medical facilities owing to the fact that the receiving hospital did not have the capability to treat her emergency medical condition.

Blue Cross, despite having provided the Mitchells with coverage documents indicating it would pay 80% of “allowed” air ambulance charges, paid only about 20% of those charges.

The Secretary argued:

1.  “A denial of a participant’s or beneficiary’s right to have a benefits claim determined in accordance with plan terms is an injury sufficient to establish constitutional standing. The Mitchells suffered an injury in fact when Blue Cross denied benefits they contend were promised by the Plan by failing to fully reimburse their medical service provider”; and

2.  In accordance with Supreme Court precedent, an ERISA participant “may include a former employee with a colorable claim for benefits.” (quoting LaRue v. DeWolff, Boberg & Assocs., Inc., 552 U.S. 248 (2008)).  The Mitchells advanced a “colorable argument that Blue Cross interpreted the Plan terms to deprive them of rights promised under the Plan” and, accordingly, established statutory standing to bring an ERISA action under Section 502(a)(1)(B).

The Secretary of Labor emphasized the fact that the four United States Circuits to consider the issue have each held that a denial of a benefits claim which is alleged to constitute a violation of the plan terms constitutes injury for Article III purposes.  Uniformly, “whether a provider decided to seek payment for services from a plan participant or whether the participant actually paid is irrelevant to the injury that the participant suffers from the deprivation of benefits owed under the plan.”  This also comports with Congressional intent underlying ERISA, common law precedent,[1] and Spokeo v. Robins, 136 S. Ct. 1540 (2016).  A ruling contrary to that of the district court’s on the issue of standing would “create an unnecessary circuit split and deny a participant the only recourse for judicial review of a plan’s denial of a benefit.”

The amicus brief also argues that, consistent with all circuit court decisions, a “provider’s actions are not determinative to an injury in fact analysis: “Whether the Mitchells assigned the proceeds of this litigation to (but not their underlying claim) to another party is irrelevant to their injury in fact… That injury is not eliminated if the provider decides not to balance bill the patient for the amount the plan did not pay.”

[1] “A breach of a promise in a plan is analogous to a breach of contract, and courts have always considered breaches of contractual promises to constitute Article III injuries.”